Palm Gets $100m Funding Boost As Losses Mount

Looks like 2009 will be a defining year...

It isn’t out the jungle yet…

Taking the chance to release alternating good and bad news is actually something of a step forward for the usually suicidal Palm press team but we’re not sure which side is coming out ahead at present.

On the good the progressive Palm App Store (pictured) stirred our imagination last week as did talk of its next generation ‘Nova’ OS and rejuvenated handsets for CES. On the other hand we’ve got this financial bombshell…

Showing its $57m last losses (initially announced as $31m) were no fluke the troubled handset maker has revealed losses for Q2 have reached almost double that at $97m. There was no good news with shipments either as unit sales slumped below 600,000 for the quarter, a 13 per cent drop on the time period last year.

“We’re working through an undeniably difficult period,” admitted Palm president and CEO Ed Colligan.

Countering this is the rather more positive development that Palm has attained another $100m in funding from long time investor Elevation Partners. This sum should therefore safeguard the company into 2009 and ensure Nova and whatever handsets it has planned get a fair chance to succeed.

“We believe that Palm is in a position to transform the cell phone industry, and we are pleased to have the opportunity to make this additional investment in the company,” said the rather brave co-founder of Elevation Partners Roger McNamee. “Palm has an industry-leading team and an exciting, differentiated product roadmap. We are proud to be associated with the company and look forward to great things from Palm in 2009 and beyond.”

Wow, let’s not get carried away here. Avoiding bankruptcy and getting some decent smartphones on the market next year seems quite ambitious enough to me…

Palm Q2 Release
Palm Funding Official Announcement

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